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The Basics of Choosing a Credit Card

April 24th, 2008

credit-cards.jpgAlthough I have never been very fond of credit cards due to my traditional opposition to deficit spending, these ubiquitous pieces of plastic have become such a fundamental component of American economic behavior that it is difficult to ignore them completely. This article by Mary White explains some of the basic issues that we should be aware of when considering which card we should use to begin establishing a reliable credit history.


When you’re thinking about getting a credit card, it’s a good idea to shop around to make sure you are getting the best possible terms. All credit cards are not created equal. Many of the charge cards that promise very low interest rates look terrific at face value, but aren’t as good as they seem when you read the fine print.

Interest Rates

Choosing a charge card with a low interest rate is a very important consideration, particularly if there is any chance that you will carry a balance on your revolving credit account. If you carry balances on high interest rate credit cards, you can very quickly find yourself sinking into debt that you may have a hard time eliminating.

It’s important to keep in mind that many credit card companies offer very low interest rates to attract new customers, but raise the rate after a certain period of time. To avoid finding yourself dealing with an exorbitant interest rate a few months after opening a new account, you have to find out the details about interest rate terms and increases before you choose a card.

Annual Fees

Some credit card programs charge annual membership fees. Such fees are often waived for the first year a new cardholder has an account with the company. Unless you read the fine print of your new account, you might not realize that an annual fee will be charged to your account each year on your anniversary date. If you don’t want to be surprised by an unexpected membership fee on your statement, find out the details of annual fees before getting new cards.

Rewards Programs

Many credit card providers offer rewards programs as a means of attracting and keeping customers. When selecting a credit card, it is a good idea to pick one that has a rewards program from which you can benefit. Common rewards programs include: airline miles, points toward hotel stays, gift card rebates, cash back, credit for gasoline purchases, and more.

Provider Reputation

Make sure that you select a credit card from a reputable lending company. Thoroughly read the application form before you fill it out and submit it. Make sure you understand all terms and conditions, and pay very close attention to interest rates and all associated fees. Avoid any lender that requests payment of a credit card application fee.

Making Your Decision

By doing your homework before you select a credit card provider, you can be assured of selecting the option that works best for you. A low interest credit card with favorable terms can be an excellent tool for building a strong credit history.



One Response to “The Basics of Choosing a Credit Card”

  1. comment number 1 by: Felex Tan

    Frankly speaking i hate using credit card,i prefer to user debit card than credit card because i know i am poor in financial planning.Credit card’s debt kills me,now still pay for the debts.

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